Cutting them a break on carried interest

Source: Washington Post Editorial (Free Registration)

Democrats like to boast that they are the party that worries about the middle class while Republicans lavish tax goodies on the rich. So a juicy tax break enjoyed by a select group of the wealthiest Americans would seem to be a natural target for Democratic lawmakers. The break, known as "carried interest," allows managers of hedge funds and private-equity firms to pay a 15 percent tax rate on a large portion of their compensation, not the 35 percent top rate for ordinary income. Eliminating this loophole could bring in several billion dollars a year. But congressional Democrats, it turns out, are too busy to get around to closing it. As reported by The Post's Jeffrey H. Birnbaum, Senate Majority Leader Harry M. Reid (D-Nev.) has quietly passed the word to those opposing the change that they can relax: Nothing will get through the Senate this year. Of course, Mr. Reid's office says, this has nothing to do with the army of lobbyists that the industry has deployed to protect its cushy deal.

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